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Perk Inc. To Be Acquired By RhythmOne PLC

Perk Inc. (TSX:PER) ("Perk" or "the Company") is pleased to announce that it has entered into a definitive agreement (the " Agreement") with RhythmOne PLC (" RhythmOne") (LSE AIM: RTHM), pursuant to which RhythmOne has...

Perk Inc. (TSX:PER) ("Perk" or "the Company") is pleased to announce that it has entered into a definitive agreement (the " Agreement") with RhythmOne PLC (" RhythmOne") (LSE AIM: RTHM), pursuant to which RhythmOne has agreed to acquire all of the issued and outstanding Common and Class A Restricted voting shares of Perk (the " Perk Shares") by way of plan of arrangement in an all-stock transaction (the " Transaction") valued at approximately US$42.5 million.

"We are pleased to announce this transaction, which will deliver a significant premium for Perk shareholders and yield an investment in a larger-scale digital media company with enhanced stock liquidity," commented Ted Hastings, Chief Executive Officer of Perk. "Founded in 2004, RhythmOne is a leader in the technology-enabled advertising market. RhythmOne's revenue for the fiscal year ended March 31, 2016 was US$166.7 million. It has a strong, debt-free balance sheet, including over US$69 million in cash and marketable securities as at September 30, 2016. At Perk, we have built a large and engaged mobile audience and we have been evaluating options to accelerate growth and scale. We anticipate the combined operations will drive higher fill rates and CPM for Perk's advertising inventory over the long-term, which will be unique and highly complementary to RhythmOne's industry-leading programmatic trading platform. This transaction improves our overall scale of operations, advertiser reach, balance sheet and stock liquidity, while providing a material premium to Perk shareholders. We are confident in the synergies that will stem from this transaction, and we look forward to joining the RhythmOne team to continue our growth trajectory."

Strategic Rationale

Premium to Perk Shareholders: Upon completion of the Acquisition and exercise of Perk's employee options, each Perk Share will be exchanged for 4.5116 RhythmOne shares. Using a CAD/GBP exchange rate of 1.6868 on 2 December 2016, the value of the consideration to be received by Perk shareholders based on RhythmOne's 30-day VWAP of £0.381 per share will be approximately C$2.90 per Perk Share, representing a premium of 11.5% to Perk's closing price of C$2.60 on 2 December 2016, and a premium of 43.6% to Perk's 30-day VWAP of C$2.02.

Greater Scale: Perk will benefit from additional scale through RhythmOne's established programmatic platform, RhythmMax. The Transaction will give Perk access to over 600 brands, 441 million global unique users and relationships with over 900 professional publishers.

Improved Competitive Positioning: The Transaction improves the competitiveness of both companies on the supply and demand side. Perk's highly engaged and verifiable audience will attract new and repeat demand partners to RhythmOne's platform, driving higher fill rates and pricing for both companies.

Revenue and Cost Synergies: The complementary product offerings of Perk and RhythmOne are expected to enhance the combined company's ability to further penetrate its core target market and enable the delivery of an enhanced digital advertising platform. The Transaction creates a company with a more diversified customer base, higher quality revenue and EBITDA and significant opportunities for revenue and cost synergies.

Greater Liquidity Profile for Shareholders: Upon completion of the Transaction, Perk Shareholders will benefit from RhythmOne's improved liquidity profile on the London Stock Exchange's Alternative Investment Market.

Expanded Leadership Team: Ted Hastings, Perk's Chief Executive Officer, together with Perk's senior management team will join RhythmOne upon completion of the Transaction. Perk's long track record of success in building, managing and profitably scaling B2C web properties and apps will directly complement RhythmOne's expertise in building and managing B2B Ad Tech businesses, while also providing scale and infrastructure to help accelerate growth.

The Board of Directors of Perk and RhythmOne have unanimously approved the Transaction and have determined that the Transaction is in the best interest of the respective companies.

Transaction Details

Pursuant to the terms of the Agreement, holders of Perk Shares will be entitled to receive 4.5116 RhythmOne common shares for each Perk Share held. Based on RhythmOne's 30-day VWAP of £0.381 per share as of December 2, 2016, the Transaction is valued at approximately US$42.5 million. This represents a consideration of C$2.90 per Perk Share and a premium of 11.5% to Perk's closing price on December 2, 2016, and a premium of 43.6% to Perk's 30-day VWAP ending on December 2, 2016. Upon completion of the Transaction, Perk will become a wholly-owned subsidiary of RhythmOne.

The Agreement provides that Perk may consider and accept unsolicited superior proposals, subject to a termination fee payable to RhythmOne and a right for RhythmOne to match any superior proposals.

Perk's Board of Directors and senior management, and AVG Ventures, LP, representing, in aggregate, approximately 39% of outstanding Perk Shares, have entered into customary voting and support agreements, pursuant to which they have agreed to vote their Perk Shares in favor of the Transaction.

The Transaction will be conducted by way of plan of arrangement under the Business Corporations Act (Ontario) and will require the approval of no less than 66 2/3% of the votes cast at a special meeting of Perk securityholders that is expected to be held in mid-January 2017. In addition to the approval of Perk securityholders, closing of the Transaction is subject to the satisfaction of certain closing conditions customary for transactions of this nature. RhythmOne shareholders have preauthorized the issuance of the required shares needed to complete the Transaction.

Additional details of the Transaction will be provided to Perk securityholders in an information circular to be mailed in mid-December, 2016.

Financial and Legal Advisors

Beacon Securities Limited is acting as exclusive financial advisor to Perk and has provided an opinion to Perk's Board of Directors to the effect that, as of December 4, 2016 and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Perk shareholders pursuant to the Transaction is fair, from a financial point of view, to such Perk shareholders. Torys LLP is acting as legal counsel for Perk in connection with the Transaction.

Cormark Securities Inc. is acting as financial advisor to RhythmOne and DLA Piper (Canada) LLP is acting as legal counsel to RhythmOne in connection with the Transaction.

Conference Call

Perk and RhythmOne will be hosting separate conference calls to discuss the Transaction.

RhythmOne hosted a webcast at 8.30am GMT; 3:30am EST on December 5, 2016. A replay of the webcast can be found at on RhythmOne's website at https://investor.rhythmone.com/.

Perk will be hosting a conference call later this morning at 8:30 am EST on December 5, 2016.

Additional information about Perk Inc. can be found at the Company's corporate website: http://www.ir.perk.com.

About RhythmOne

RhythmOne is a technology-enabled digital media company that connects online audiences with brands through premium content across devices. Founded in 2004, RhythmOne pioneered Internet video search and works with digital advertisers, publishers and content providers to offer fully integrated, cross-screen solutions that span desktop and mobile video, rich media, display, social and native advertising, and content formats. Through its fully integrated programmatic platform, RhythmMax, RhythmOne represents digital advertising inventory across owned, controlled and extended supply sources. The RhythmMax platform includes unique brand safety technology, RhythmGuard, which combines leading third-party verification and proprietary filtering technologies to ensure inventory quality in brand safe environments. RhythmOne's goal is to maximize the return on advertising spend and provide the most efficient and effective marketplace for digital advertising. RhythmOne is headquartered in San Francisco, California with offices in the US, UK and Canada. For more information, please visit www.rhythmone.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including which may relate to, but which may not be limited to, Perk's business; Perk's strategy, operations and financial performance; Perk's user and advertiser engagement; Perk's ability to establish new marketing partnerships; Perk's ability to expand into new markets; and Perk's ability to acquire and integrate new businesses and technologies. Such forward-looking statements reflect Perk's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. When used herein, the words "anticipate", "believe", "estimate", "upcoming", "plan", "target", "intend" and "expect" and similar expressions, as they relate to Perk or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to Perk and are subject to a number of risks, uncertainties, and other factors that could cause Perk's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements, including, but not limited to: maintenance by Perk of relationships with advertising network providers and partners; successful development of the "Perk" brand; Perk's ability to keep up with rapid technology developments in Perk's markets; Perk's ability to avoid defects in products and services delivered by Perk; Perk's ability to attract app and website developers to its SDK's; Perk's ability to successfully enter new business areas and geographic markets; and the success of new products developed by Perk; Perk's ability to retain key members of its management team. Perk does not undertake to update any forward-looking statement, except as required by law.